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We’re Doomed

A couple of items crossed my path Tuesday that reinforces my feeling that politics is a waste of my time.

First, I read an editorial in Barron’s about the financial services bill. In their opinion, it’s 2,300 pages of rules that will increase reporting requirements, but not solve any real problems. They compare it to the Sarbanes-Oxley bill that was passed right after Enron. Sarbanes-Oxley was a gold mine for IT consultants – it made me a lot of money for a while. But, did it really solve any problems?

Second, my friend Darrin commented on my previous post. In it he asked a very important question: do I trust Congress to write appropriate, effective laws? Well, based on my experience – no. I get enraged when I hear that they vote without even reading them. Of course, who would want to read them? I downloaded the health care bill (another poorly conceived 2000+ page group of new laws) and I couldn’t read it either.

So, I still believe that industry cannot regulate themselves, or control their instinct to make bad decisions to serve short-term profit motives. And, I now acknowledge that Congress (this Congress, at least) is not competent to write effective regulations. Where does that leave us? Doomed.

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SOX did nothing good for the US, although it is great for the accountants. SOX has failed to achieve any of its goals and is killing US innovation (see http://hallingblog.com/2010/01/04/sarbanes-oxley-obstructing-innovation/). In 1996 the US had 60% of the worldwide IPOs in 2005 we had only 20%. Unfortunately, SOX is just one of several laws since 2000 we have passed that are killing innovation in the US. The incredible innovation of the 90s was based on technology start-up companies built on intellectual capital, financial capital, and human capital. All three of the pillars have been under attack since 2000. Our patent laws have been weakened reducing the value of intellectual capital. Sarbanes Oxley has made it impossible to go public reducing financial capital for start-ups and the FASB rules on stock options have made it harder to attract human capital to start-ups. The Decline and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation http://www.amazon.com/Decline-Fall-American-Entrepreneur-Regulations/dp/1439261369/ref=sr_1_1?ie=UTF8&s=books&qid=1262124667&sr=8-1, explains these problems in more detail.

We could also re-structure Congress in such a way that it would discourage career politicians and encourage people from the private sector to spend a limited amount of time in Congress and use their real world knowledge and wisdom to write and pass laws that actually help the American people rather than hinder them.

I also think we need to rethink the terms of office for federal office. Our Congresscritters need term limits, I think 2 terms for senators (12 years) and perhaps 4 2 year terms (8 years) for representatives. We also should change the calendar for campaigning.... There are so many of our congresspeople in both houses who seem to spend far more time campaigning for re-election than actually writing, debating, or passing any legislation. Heck Obama started campaigning for president in January 2007. He spent 1/3rd of his time as senator running for president as opposed to actually serving in Congress like we elected him to do... That's a bit ridiculous!

Congress has to remember that they're there to serve US, we're not here to serve them!

Moreover, Altucher says the notion that buying a home is a ticket to financial security is a "scam" perpetrated on the American people by corporations seeking to keep us in debt, less mobile and with the storage to purchase all sorts of needless consumer goods.James Altucher of Formula CapitalThe discussion was about the investment return of a home. Since 1929, on average, a home has returned 0.4% per year. Compare that with stocks at roughly 8%, including the latest nasty downturn. There are so many other expenses involved with a house that you would not spend if you were renting:Insurance premium. Property taxes (which usually offset any tax deduction you get from your mortgage interest). Maintenance (pipes break, electricity problems, etc.). Remodeling costs. Utilities (utilities and maintenance for renters is often reflected in the rental price, but it's not reflected in a mortgage when you own). Yard work, pest control, etc. (again, rents usually have this built in…

From today’s Yahoo News:“Members of the Congressional Tea Party Caucus may tout their commitment to cutting government spending now, but they used the 111th Congress to request hundreds of earmarks that, taken cumulatively, added more than $1 billion to the federal budget.According to a Hotline review of records compiled by Citizens Against Government Waste, the 52 members of the caucus, which pledges to cut spending and reduce the size of government, requested a total of 764 earmarks valued at $1,049,783,150 during Fiscal Year 2010, the last year for which records are available.”I thought at least these guys could resist spending for a little while. Sure, it’s “chump change”, but that’s not the point. Technorati Tags: politics,government spending,tea party